On April 1, 2023, new National Minimum Wage (NMW) and National Living Wage (NLW) rates will come into effect. The NLW, which is the minimum hourly rate that must be paid to those aged 23 or over, will increase to £10.42, representing a 92 pence increase over the current rate. The hourly rate of the NMW for 21-22 year olds will increase to £10.18, a rise of £1. The rates for 18-20 year olds will increase to £7.49, a rise of 6.6 pence, and the rate for workers above the school leaving age but under 18 will increase to £5.28, a rise of 47 pence. The NMW rate for apprentices will increase by 47 pence to £5.28. Additionally, the accommodation offset will rise to £9.10 per hour, an increase of 40 pence.
It’s important that employers update their systems by April 1, 2023, to reflect the new rates, as there are significant penalties for employers who are found to have paid workers less than the above rates. If you have underpaid an employee, you must pay any arrears immediately. There are penalties for non-payment of up to 200% of the amount owed, unless the arrears are paid within 14 days. The maximum fine for non-payment can be up to £20,000 per employee, and employers who fail to pay face a possible 15-year ban from being a company director, as well as being publicly named and shamed.
At CDC Accounting, we understand that the upcoming changes to the NMW and NLW rates may have an impact on businesses of all sizes and sectors. That’s why we offer tailored solutions to help identify areas where businesses can improve their financial management and implement strategies to mitigate the impact of the wage increase.
Our team of experienced accountants can conduct a thorough review of your business operations and finances to identify areas where cost savings can be made without compromising the quality of your goods or services. We can also provide advice on improving your cash flow, reducing unnecessary expenses, and streamlining your financial processes to maximise efficiency.
We understand that every business is unique, and that’s why we take the time to listen to our client’s needs and tailor our services accordingly. Our goal is to help you navigate the challenges of the wage increase and come out stronger on the other side.
If you’re concerned about the impact of the wage increase on your business, contact us at CDC Accounting to schedule a consultation. We’ll work with you to develop a customised plan to help you prepare for the upcoming changes and position your business for long-term success.